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Bono Mack Says Consumer Protection Top Priority as Privacy Hearings Begin


Location: Washington, DC

Congresswoman Mary Bono Mack (CA-45), Chairman of the House Subcommittee on Commerce, Manufacturing and Trade, delivered the following statement as part of a nationally-televised hearing she chaired today on consumer privacy:

Good morning. From data breaches in the United States to a cell phone hacking scandal in Great Britain, consumer privacy has become part of our national consciousness. Today, we have a unique opportunity to make a real difference in the lives of millions of Americans, and I look forward to working with Chairman Walden and Members of both of our Subcommittees on this unique challenge.

We often hear that privacy laws in Europe are much stricter than they are in the U.S. If that's so, it's hard to understand how the phone hacking incidents in Britain could have gotten so far out of hand. It raises the question of whether American consumers are as vulnerable as politicians and celebrities in London. I hope that Chairman Genachowski will address this issue as we continue to gather the facts.

This morning, we begin a very important and, some say, long overdue debate. When it comes to the Internet, how do we -- as Congress and as Americans -- balance the need to remain innovative with the need to protect privacy?

The explosive growth of technology has made it possible to collect information about consumers in increasingly sophisticated ways. Sometimes the collection and use of this information is extremely beneficial; other times, it's not. Frankly, I am somewhat skeptical right now of both industry and government. I don't believe industry has proven that it's doing enough to protect American consumers, while government, unfortunately, tends to overreach whenever it comes to new regulations. That's why this debate must be deliberate and thoughtful, but without question…it's time for this debate to take place.

Even though it serves billions of users worldwide -- and this year e-commerce in the United States will top $200 billion for the first time -- the Internet pretty much remains a work in progress. Still, in just 25 years, the Internet already has spurred transformative innovations. It has incalculable value. It has become part of our daily lives. And it has unlimited potential to affect positive social and political change, as the world dramatically witnessed during The Arab Spring.

But the Internet has brought about more subtle cultural changes as well. Think about it for a second. If a total stranger knocked on your door one day and asked for your name, birth date, relationship status, number of children, educational background, email address and Social Security number, would you give that information out freely? Probably not.

Yet today, as consumers, we willingly dole out this personally identifiable information online -- literally bit by bit. This information is then compiled and collated by computers to produce personal profiles used in online behavioral marketing and advertising. This data mining helps to pay the freight for all of the information that we get for free on the Internet. But does it come at too great an expense to consumer privacy? That question cuts to the heart of this very important issue.

Applications providers continue to increase the variety of tools available to American consumers to control their privacy settings, but a nagging problem for most consumers is the lack of a basic understanding about how companies use and collect this information. While survey after survey indicates that consumers harbor serious concerns about their privacy, it is unproven and unclear whether more stringent laws and regulations relating to the collection and use of data will satisfy these concerns in a way that encourages continued innovation and an expansion of electronic commerce.

As Congress takes a closer look at online privacy issues, industry has stepped up its self-regulatory efforts relating to the collection and use of consumer information. These industry-wide efforts include expanded consumer education and site transparency to increase consumer comfort with how industry uses their information, as well as the development of new preference profiles so consumers can personalize their browsing experience and control just how much information they actually want to share.

As I listen closely to all of your thoughts, I would also like to share a few of my own thoughts with you.

* First and foremost, greater transparency is needed to empower consumers. While it's still unclear to me whether government regulations are really needed, providing consumers with more transparency is the first step in better protecting Americans.

* Consumers should be notified promptly if there is a material change in a privacy policy; no bait and switch schemes should be allowed nor tolerated.

* Sensitive information should have greater safeguards in place, especially when it comes to financial and personal health records.

* We should take a long look at how our children are treated online and how they are marketed to.

* We need to closely re-examine privacy laws that are currently on the books. Do we need a single regulator to protect consumer privacy? While I personally support this concept, we should first look at its potential impact on consumers.

* And finally, what part should "no harm, no foul" play in this debate. Over the last few months, the Federal Trade Commission and the Department of Commerce have issued extensive reports concerning online privacy. However, there is little proof of any substantive consumer harm. Before regulations are enacted, there should be a "definable" problem, such as we are seeing in the area of data protection.

As we move ahead with our hearings, I look forward to a robust discussion with all of my colleagues on the Committee as well as industry and consumer groups. Working together, we can make innovation and privacy a shared priority, and the Internet the 8th Wonder of the World.

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